T &G, Globe sale draws 1 serious bidder, and several with potential

Friday

Mar 22, 2013 at 7:00 PMMar 22, 2013 at 7:09 PM

By Shaun Sutner TELEGRAM & GAZETTE STAFF

A month after the New York Times Co. unveiled plans to sell the Telegram & Gazette and the Boston Globe, the existence of only one bidder is known, though several potential buyers have talked publicly and privately about their designs on the newspapers.

The group that reportedly bid $100 million for the Times Co.'s New England Media Group in January is led by Rick Daniels, 54, a Boston native who worked for the Globe for more than 22 years. As president and general manager of the Globe from 2001 to 2005, he helped oversee the T&G's business operations.

The Globe and T&G have been intertwined as sister publications since the Times Co. bought the T&G for $296 million in 2000. The Times is marketing both properties, including their Web sites and Globe Direct, a direct mail firm, as a package.

The formal offer from Mr. Daniels and the private equity firm Boston Post Partners came after discussions over the past year, and the Times Co., as a public company, was then forced to open up the sale, the Wall Street Journal first reported Feb. 22.

Abbe Serphos, a spokeswoman for the Times Co., declined comment on the sale.

Not much is known about Boston Post Partners, which was formed Jan. 24 of this year as a vehicle for the acquisition of the Globe and T&G.

Its stark website gives no information about the firm's assets, business history or backgrounds of its two principals, who have extensive business experience, if out of the public spotlight.

While Mr. Daniels and his partners, Heberden W. Ryan and John L. Bridge, the Boston Post Partners principals, declined comment for this story, JonTapper, a spokesman for the company, provided this statement: “The Boston Globe and the Worcester Telegram & Gazette are two of the best and most important newspapers and digital media sources in New England,” Mr. Tapper said. “Producing great journalism costs money, and it needs to be supported by a strong and viable business. Our intention is to give these news organizations the economic viability they need to bring great journalism to their consumers and their communities.”

Observers who have followed Mr. Daniels' long newspaper career, as well as the career of Mr. Ryan, 44, who ran advertising for several dozen national magazine titles for publishing giant Hachette Filipacchi, say they are seasoned media professionals with an interest in quality journalism.

Mr. Daniels was also directly involved in dramatic staff reductions and other cuts at the Globe in the mid 2000s, cutting 20 percent of the workforce and wringing concessions from Globe labor unions.

“He's smart and shrewd, and he has a soul,” said Peter Kadzis, longtime editor of the Boston Phoenix, which ceased publication last week.

As for Mr. Daniels' partners, Mr. Kadzis said: “It takes investors with strong stomachs and a certain vision to make a newspaper play.

“Why would they do it? Two reasons: a sense of public service, and a sense of “let's have some fun,” he added.

As newspapers — including the Globe and T&G — have seen circulation and revenue declines over the last decade, some media analysts have focused on the role of highly leveraged equity firms buying distressed newspapers only to make harsh cuts that end up damaging editorial quality.

However, Mr. Ryan and Mr. Bridge believe that they have enough capital to make a competitive bid and not be over-leveraged after the sale, said Mr. Tapper, the Boston Post Partners spokesman.

As for other potential buyers, it is unknown whether a partnership of suburban car mogul Ernie Boch and radio station owner Bruce Mittman, has made a formal offer.

“It's very early in the process. We're still pursuing it,” said Mr. Mittman, who once ran the former Worcester-based hard rock radio station WAAF. “Ernie's an experienced business guy with wonderful skills and instincts, and both of us combined will be more than capable of managing the process.”

The auction would likely take six to nine months, Times Co. Vice President Michael Golden told T&G employees at a meeting last month. Ms. Serphos, the Times spokeswoman, said she would not “speculate” on the time frame of the sale.

Local Worcester ownership is unlikely because the Times Co. is trying to sell the T&G and Globe together, said James Donnelly, a Worcester lawyer active in civic affairs who has talked with local people interested in the future of the T&G.

Meanwhile, another Boston group that is said to be assembling investors for a bid is led by members of the Taylor family, who owned the Globe's former parent company, Affiliated Publications, until the Times Co. bought it for $1 billion in 1993.

Any Taylor bid could possibly be augmented by Worcester-area investors seeking to assure that the T&G remains independent and focused on Central Massachusetts coverage, according to a source familiar with local business people interested in the sale.

In any event, other potential buyers, both local and non-local, could also be looking at the papers as Evercore Partners, the investment firm the Times hired to conduct the auction, prepares detailed information on the papers' financial operations.

A source familiar with the process said the financial information is being prepared. After that, bidders can take a month or more to scrutinize the financials before submitting or modifying bids.

Mr. Daniels, the former Globe executive, most recently was president of Gatehouse Media New England, leaving in December 2012 after five years at the national chain of suburban weeklies and smaller regional papers.

At Gatehouse, where he also was publisher of the Quincy Patriot-Ledger and the Brockton Enterprise dailies, Mr. Daniels directed $30 million in cost cutting at the company, which is burdened by $1.2 billion in debt, according to his résumé.

Mr. Ryan, the managing partner of Boston Post Partners, worked at Hachette Filipacchi Media from 1992 to 1996, when it published titles such as Road and Track and Elle magazines. A graduate of Harvard College with an MBA from Harvard, he was previously general partner of Megunticook Management Co. specializing in traditional and digital media and information services.

“He knows what he's doing on the marketing and business side of magazines,” said Samir Husni, director of the Magazine Innovation Center at the University of Mississippi. “That's essential for the future of newspapers because newspapers have become like a daily magazine.”

Mr. Bridge, the other Boston Post Partners principal, spent 21 years in management and corporate finance at Aetna Inc., the large managed care company, according to the website of the TGSC Group, an auto glass industry consulting company of which Mr. Bridge is a director.

Mr. Bridge, a graduate of Trinity College with an MBA from Northwestern University, is also CEO and president of Teratech Corporation, a maker of ultrasound equipment.

Contact Shaun Sutner at ssutner@telegram.com or @ssutner.

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